Annuity Payout Calculator
Choose Payment, then enter the balance as the present value, the interest rate per period and the number of payouts. The calculator works out the equal payout that leaves the balance at zero after the last one. Pick Ordinary for payouts at the end of each period or Annuity Due for payouts at the start. The rate applies once per period, so for monthly payouts enter the annual rate divided by 12 and the number of months. The other two modes find the present value or the future value of a run of equal payments.
How to use the Annuity Payout Calculator
- Press Payment at the top of the calculator.
- Enter the present value, the balance the payouts come from.
- Enter the interest rate per period and the number of payouts. For yearly payouts that is the annual rate and the number of years. For monthly payouts, divide the annual rate by 12 and enter the number of months.
- Choose Ordinary for payouts at the end of each period or Annuity Due for payouts at the start, then press Calculate.
The annuity payout formula
PMT = PV · r / (1 − (1 + r)^−n)
PV is the balance when the payouts start, r is the rate per period you enter and n is the number of payouts. The result is the equal payout that leaves a balance of zero after the last one. For an annuity due, paid at the start of each period, the calculator divides that payout by (1 + r). At 0% it divides the balance by n.
Worked example
A $500,000 balance pays out once a year for 20 years at 4%. Choose Payment and enter a present value of 500,000, a rate of 4 and 20 periods. As an ordinary annuity, PMT = 500,000 × 0.04 ÷ (1 − 1.04^−20) = $36,790.88 a year. As an annuity due, paid at the start of each year, the payout is $36,790.88 ÷ 1.04 = $35,375.84.
Frequently asked questions
Can it tell me how long my balance will last?
No. This calculator finds the payout for a number of periods you enter. It has no mode that solves for the number of periods. The finance calculator has one. Choose Periods, then enter the balance as the present value, the payout as a negative payment, a future value of 0 and the rate. It counts each payout at the end of a period. With 500,000, -36,790.88, a rate of 4 and 1 period per year it shows 20 periods.
How do I work out a monthly payout?
Divide the annual rate by 12 and enter the number of months. A 20-year payout at 4% a year is 240 periods at 4 ÷ 12 = 0.3333% each. The calculator applies the rate you enter once per period and does not convert it.
Does it cover a life annuity?
No. It works out payouts over the number of periods you enter, and the balance is zero after the last one. There are no age or life expectancy inputs, so it cannot work out payments that last for life.
What is the difference between Ordinary and Annuity Due?
Ordinary pays at the end of each period, so the balance earns one period of interest before the first payout. Annuity Due pays at the start, which makes each payout smaller by a factor of 1 + r. At 4% a year, $500,000 over 20 years pays $36,790.88 at the end of each year or $35,375.84 at the start.
Does the payout include fees or tax?
No. The calculator applies the rate you enter and nothing else, so the payout comes before any fees, surrender charges or tax. If your contract quotes a rate after fees, enter that rate.